'This is going to be a long road' … Tony Judt in Manhattan, 2008. Photograph: Lisa Carpenter

In this marvellous book, two explorers set out on a journey from which only one of them will return. Their unknown land is that often fearsome continent we call the 20th century. Their route is through their own minds and memories. Both travellers are professional historians still tormented by their own unanswered questions. They needed to talk to one another, and the time was short.

Tony Judt, author of Postwar, found that he was suffering from ALS (amyotrophic lateral sclerosis), an incurable degenerative disease. His friend Timothy Snyder, a younger American historian, offered to help Judt create his final work. It takes the form of a series of conversations, recorded and then transcribed for Judt's approval over the best part of two years. Judt died in August 2010, a few weeks after dictating a long "afterword", which is as lucid as anything he had written. He was 62 years old.

The two are talking without notes, references or inhibitions. As they grow excited, one thing leads off into another, and Snyder – as editor – hasn't made the mistake of imposing too much thematic order. He did, however, persuade Judt that he ought to talk about himself and his personal life as well as his opinions. As Judt himself says at one point: "You cannot fully appreciate the shape of the 20th century if you did not once share its illusions."

Born in London in 1948, into a Jewish immigrant family, Judt acquired commitments but surprisingly few illusions. He was a "Marxisant" historian, but not a communist. He gave much of his early career to the history of the French left, but could not buy its arrogant assumption that the Russian revolution was merely the continuation of 1789. He was briefly "swept away" by the évènements of 1968, but "my residual socialist-Marxist formation made me instinctively suspicious of the popular notion that students might now be a – the – revolutionary class."

Only Zionism seized and then deluded him, at the age of 15. He worked loyally on leftwing kibbutzim and served in the Israel Defense Forces until it dawned on him that he had never met an Arab and that most Israelis "out there" were anything but socialist and ethnically tolerant. Since then, his criticism of the state of Israel has been biting; his New York Review of Books article in 1993 calling for a "single-state" solution, aroused what he calls "a firestorm of resentment and misunderstanding". In these dialogues, he returns often and irritably to American Jews "who have cast their lot with Likud". To him, "the fear that Israel could be "wiped off the face of the earth" … is not a genuine fear. It is a politically calculated rhetorical strategy."

Though they agree that intellectuals made fearful mistakes between the rise of Stalinism and the Iraq war, neither Judt nor Snyder quite define what an intellectual is. At one point, Judt says that an intellectual needs to show that "the way in which he or she contributes to local conversation is in principle of interest to people beyond that conversation. Otherwise, every policy wonk and newspaper columnist could credibly claim intellectual status". This rather contrasts with his view that American intellectuals failed over the Iraq war and that only certain journalists displayed integrity and consistency. But elsewhere he declares that "The role of the intellectual is to get the truth out … and then explain why it just is the truth." What he doesn't want is intellectuals offering grand narratives or "large moral truisms".

The intellectual sin of the century, for him, was "passing judgment on the fate of others in the name of their future as you see it …" For Judt, "the biggest story of the 20th century" was "how so many smart people could have told themselves such stories with all the terrible consequences that ensued". Here Snyder intervenes. Eric Hobsbawm is cited repeatedly and with great respect in these conversations, but Snyder asks: "How can it be that someone who made that kind of mistake" – staying in the Communist party – "has become in the fullness of time one of the most important interpreters of the century?" Judt answers with his remark about the need to have shared the illusions of that period, "especially the communist illusion"; Snyder concedes that such experience grants a historian "sympathetic understanding".

Snyder is by no means a mere prompter, although the main voice here is Judt's. Twenty-one years younger, he pokes gently into gaps in Judt's account of himself. Why did he evade for so long "the manifest centrality of the Holocaust" to his subjects, like other Jewish scholars of his generation? Or how, as a new American citizen, can he say that "I profoundly do not identify with America, the United States" and yet – a few minutes later – talk about "our American failure to address this subject" of Israel? And he seems puzzled by Judt's punctilious habit of referring to "England" rather than "Britain" in matters of culture and identity.

On the other hand, Snyder knows things about east European cultural history which Judt doesn't. And it's Snyder, by asking whether intellectuals can really operate with vague global categories, who provokes Judt into proclaiming that "there is no such thing as a 'global audience' … labels to the contrary notwithstanding, there is no such thing as a 'global intellectual': Slavoj Žižek does not actually exist." Judt insists that it's the "middle ground", still essentially the individual nation, that matters: "Anyone seriously concerned with changing the world is likely, paradoxically, to be operating above all in this middle register."

Brilliantly eloquent, and apparently recalling every book they have ever read, the two historians find something striking and original to say about almost everything. Judt takes a devastating slash at English comprehensive education ("Britain proceeded backwards, from a recently established social and intellectual meritocracy to a regressive and socially selective system of secondary education whereby the wealthy could once again buy an education all but unavailable to the poor"). He is testy about postmodern "cultural studies" ("a sort of half-conscious academic charivari") and pseudo-Marxist social history that "merely replaced 'workers' with 'women' or students, or peasants, or – eventually – gays".

They discuss how the first world war led intellectuals not only to pacifism but also – especially in Italy and Germany – to a celebration of violence and bloodshed, in which fascist writers could admire Lenin for his sheer ruthlessness. They compare French intellectual reactions to the Dreyfus case with American failure to speak out against the 2003 Iraq war, ask why Marxism caught on so strongly in Catholic countries, and recall that "socialist" Britain after 1945, supposedly so regimented, actually had no national plan at all – in contrast to continental nations.

But the dialogues converge, slowly but surely, on Judt's passionate alarm about the world we now inhabit. In Postwar and in the blazing, urgent polemic of his last book, Ill Fares the Land, Judt defended the European "social democratic" consensus of the postwar years and demolished the intellectual foundations of the Reagan-Thatcher epoch that followed. Today, he says here, all the postwar certainties about employment, health, culture or comfortable retirement have been replaced by a new condition of fear. "It seems to me that the resurgence of fear, and the political consequences it evokes, offer the strongest argument for social democracy that one could possibly make."

Judt suggests that the main conflict of the 20th century was not simply about freedom versus totalitarianism, but about the role of the state. After 1945, liberal reformers "forged strong, high-taxing and actively interventionist states which could encompass complex mass societies without resorting to violence or repression". They replaced "the erosion of society by the politics of fear" with "the politics of social cohesion based around collective purposes".

He's right, surely, that we should remember that century not only for war and Holocaust, but for the most magnificent humane achievement in history. Judt and Snyder ask each other if it would take disaster, even wars, to retrieve that spirit. No, it's for intellectuals "to remake the argument about the nature of the public good". Tony Judt's last words are hot with his typical courage: "This is going to be a long road. But it would be irresponsible to pretend that there is any serious alternative."